1 Franchise Overview

The franchise business model is typically used by retailers to scale up business operations and market presence, particularly in new markets. In this model, retailers may choose to utilize business partners called franchisees to manage branded or co-branded stores while retaining the retailer's business processes and value proposition. Franchisees may operate one or more stores under the retailer's banner. Franchise models can vary by geography, ease of market entry and line of business. There can also be variances in mode of profiting sharing (license fee vs % of profits vs preferential rates), inventory management (franchisee managed as opposed to franchiser managed), and so on. The Merchandising system supports a franchise model that offers customer management, franchise costing and both retailer-managed as well as franchisee-managed inventory capabilities. A comprehensive description of the Franchise Management features available in Merchandising can be found in the Franchise Management whitepaper.